10172022 BUSINESS

GB electricity costs

below rest of Bahamas

By NEIL HARTNELL

GRAND Bahama’s electricity costs will be 40 percent lower than Nassau’s and the rest of The Baha mas during the 2023 summer peak after the island’s utility locked in fuel costs at 12-14 cents per kilowatt hour (kWh).

Dave McGregor, Caribbean chief operating officer for Emera, Grand Bahama Power Company’s 100 per cent owner, told Tribune Business he hoped the difference in energy costs would steer investors towards the island and help revive its struggling economy.

“If I were to believe the num bers we’re seeing out of BPL next summer, all things being equal, we’ll be 40 percent less cost than the rest of The Bahamas,” he asserted. “I’ve seen the numbers that BPL has pushed out for next June. If they are at 27 cents per kWh, and we’re at 12-13 kWh, that’s a huge differ ence and I hope that helps investors

decide where to invest because Grand Bahama needs it.”

GB Power’s fuel costs will be close to half, or 50 percent less, than BPL’s for the nine-month period between March and November 2022 based on what the latter unveiled recently.

BPL’s fuel charge will hit 23.3 cents per kWh for the three months from March 1 to end-May 2022; 27 cents for the June to end-August period;

and 25 cents for September to endNovember 2022.

These compare to the 12-14 cents per kWh charge that GB Power estimates it will have to levy on customers throughout 2023 after it managed to lock-in 80 percent of its fuel needs for 2023 at $51 per barrel via its continuing hedging strategy. The figures, and the differences with BPL, thus give New Providence residents and businesses - and those through the rest of The Bahamas - an insight into what might have been had the state-owned utility continued its hedging.

Tribune Business previously revealed a December 9, 2020, e-mail from former BPL chief executive, Whitney Heastie, to the then-Board revealing that the hedging strategy executed via the Inter-American Development Bank (IDB) had pro vided the foundation for an 11.5 cents per kWh fuel charge for all cus tomers through to March 2024.

“The hedges approved by the Board were finally executed as per

The Bahamas’ top two life insurers downgraded

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE Bahamas must “take concrete steps” to reverse the trend of sovereign credit rating downgrades after the coun try’s two largest life and health insurers saw their own financial strength assessments slashed as a result.

Patrick Ward, Baha mas First’s president and chief executive, made his call before A. M. Best, the international insurance credit rating agency, on Friday downgraded both Colina Insurance Company and Family Guardian due to the latest sovereign

downgrade imposed on the The Bahamas by Moody’s.

Pointing to the extra risk generated by the fact the both BISX-listed life and health insurers have business portfolios almost entirely concen trated in The Bahamas, A. M. Best cut the financial strength rating for both to ‘B++’ (Good) from ‘A-’ (Excellent).

And the long-term issuer credit rating for each was also slashed to ‘bbb+’ (Good) from ‘a-’ (Excellent), with both parent companies - Colina Holdings (Bahamas) and FamGuard Corporation seeing their own longterm issuer credit ratings to

Union chief says: ‘Don’t encourage mediocrity’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

A TRADE union leader says the labour move ment “must not encourage mediocrity” in the work place as he urged patience when over trying to achieve all goals in industrial negotiations.

Obie Ferguson, the Trades Union Congress (TUC) president, told Trib une Business that while unions may “not get eve rything we want when we want it” they should adopt a strategy of “taking it block by block, corner by corner, piece by piece” until eventually all targets are

met by playing a long-term game.

“People who work in this country legally, whether on a work permit or what ever, should be protected - not from mediocrity but, if their employer treats them

No sanctions over price control ‘death warrant’ execution

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE GOVERNMENT

last night backed down from imposing sanctions on food retailers and phar macists who fail to enact the expanded price control regime - which one branded “a death warrant” - by today’s deadline.

The Ministry of Eco nomic Affairs and Ministry of Health and Wellness, in statements issued nearsimultaneously and using almost identical language, said no “penalties” or enforcement measures will be levied against food stores, pharmacies and their wholesale suppli ers during the “extended period” necessary to adjust inventory, margins and mark-ups to the new regime’s requirements.

The move came after Prime Minister Philip

Davis KC was warned by Philip Beneby, the Retail Grocers Association’s president, that merchants would not implement the new price controls by today - as required by law under newly-signed regulations - because to do so would leave them facing “mas sive losses” and be akin to “signing a death warrant for our businesses”.

Mr Beneby’s letter to the Prime Minister, which was being widely circulated on social media, added that the addition of 38 prod ucts to the price control regime would make “opera tions unfeasible” for small and mid-sized food stores since between 40-60 per cent of their inventory will be covered by governmentimposed mark-ups resulting in these items being sold at a loss.

Subsequently confirming that the letter is authentic,

Missing the mark on our economic dignity

From a regional per spective, the mission of getting Carib bean countries to a position of economic sustainability and resilience will demand national innovation, pro ductive creativity and a herculean effort on prudent fiscal management. It will also require an unfailing commitment to delivering value across the broadest socio-economic divides that these countries have ever experienced, and a radi cal cultural shift at multiple levels.

This is in part because the region is experienc ing the most challenging economic crisis in modern history. Consequently, there are increased pressures on the vulnerable population segments. The rest of the explanation lies in the fact that there has been a level of social and economic iner tia across the region that has effectively arrested gen erations of the same families and groups in a cycle of per ennial economic and social struggle. This often harkens as far back as the pre-inde pendence era, indicating that many have yet to fully appreciate the true benefits of self-determination.

This highlights an urgent need for economic inter vention that is sufficient to change the fortunes of these

Hubert edwards by

not depend as heavily on certain associations as they do today, while the possibility of failure should not hinge on the lack of connections.

Knowledge of the Carib bean will cause reasonable persons to readily agree that this is a major obstacle to national development. Too many persons are left behind because of who they are or, more profoundly, who they are not and what they do not possess.

many, generationally speak ing, have yet to truly feel the warmth of economic advancement and deep social enfranchisement.

people, offering greater social and economic facili tation and second (even multiple) chances to per sons who have failed or are failing.

There is an urgent need for a system that does not care about past failings,socioeconomic origin, social status, connections and asso ciations. Available resources and wealth must be targeted at facilitating opportunities for growth and development among the widest swaths of citizens possible. The chances of success should

Paradoxically, in the grander scheme of global economics, this is exactly what has happened to Car ibbean countries.They have been left behind by the harsh withdrawal, and deprivation of the means of economic development, by former colonisers without an effec tive economic replacement model.

At a time when the world was leveraging industriali sation, the Caribbean was largely plunges into an exist ence of labour-intensive commerce. Our national historical experiences of being disadvantaged have failed to inform a better approach in lifting people from poverty or disenfran chisement. The fervour which developed from that experience, igniting the desire for independence, has been displaced in that

The Bahamian Experience Analysis will show that historical and pre vailing approaches to governance and economic empowerment, built largely on the concept of “trickledown economics” in The Bahamas, have not proven effective in creating the type of seismic shifts needed to facilitate broad-based eco nomic equity. There is a need for greater benefits to accrue to non-traditional and vulnerable groupings. There is a need for the sen timents that drive the idea of “the American Dream” to become endemic in the psyche of this country and others in the Caribbean. Fundamentally, there is a need for greater social and economic equity, and there is a sense that public policy has a significant role to play in this becoming a reality.

This reality comes from my understanding of the oft-mentioned term in the Prime Minister’s lectures, “economic dignity”. This is a bold proposition designed to strike at the very heart of unequal opportunity and generational disenfran chisement. This is solely my conclusion and, to some

extent, speculation. How ever, a reasonable inquiring mind must wonder whether there is more to this and how it might be currently informing policy, even if not explicitly stated.

The Prime Minister was, in my mind, intending to deliver this substantial idea. The message I believe can be summarised as fol lows: “Economic dignity is the central foundation on which I will pursue eco nomic empowerment for the people and, in contrast, here is how, up to now, it was not achieved and why.” In The Bahamas, as in other coun tries, discussions such as these are always going to be met with natural tensions.

To make the point, lis teners to or readers of the speech will recall the historical expose in the lec ture. This was intended, in my opinion, to show how approaches to economic development over the years have missed the mark of achieving what the con cept of “economic dignity” espouses.

It, however, came across as an endorsement of oneparty and dismissed the efforts of another, with some qualifications based on who the leader might have been at any point in time. The fact is, if one approaches the lecture in the purist manner with which Gene Sperling argues the concept, you are likely to better appreci ate that the lecture might have been signalling the perceived shortcomings of all administrations to date vis-à-vis that idea at the core of “economic dignity”empowerment of the masses.

It is easy to argue that The Bahamas has achieved notable economic success.

However, there is always the risk of realising “national success” without broadbased impact on the general population, while also expe riencing a continued and dangerous narrowing of the middle class and an even more debilitating broaden ing of populations living at or below the poverty line.

This is the antithesis of the ideas promulgated by Gene Sperling. He argues for a “Dignity Net” as opposed to the traditional “safety net” where individuals, regardless of disadvantages, including debilitating physi cal or mental abilities, are able to contribute, thrive

and pursue purpose. He argues for broad-based eco nomic equity where, despite their background, more per sons are able to enjoy the country’s patrimony. This is essentially an environment where individuals have a more dignified experience one that is akin to the black sanitation workers of the Martin Luther King Jr civil rights era being accepted as men.

For The Bahamas and the region, this type of bal anced achievement will demand an acute under standing of the challenges the ordinary citizen faces, and transformative govern ance undergirded by a sound philosophy and committed leadership.

Public pronouncements by leaders are significant, and provide important clues as to personal convictions that may influence public policy.

From the Prime Minister’s lecture, one might conclude that economics and the economy are not top pri orities. One might instead believe that matters such as education and human development are. The issue, though, might be a circular argument that rec ognises the latter elements are important facilitators of the broad-based level of human dignity and achieve ment realised from the economy’s output. This is part of the essence of “economic dignity”. The question is: Are there lead ers who have the conviction to act in this direction.

NB: Hubert Edwards is the principal of Next Level Solutions (NLS), a manage ment consultancy firm. He can be reached at info@nlso lustionsbahamas.com. He specialises in governance, risk and compliance (GRC), accounting and finance. NLS provides services in the areas of enterprise risk management, internal audit and policy and procedures development, regulatory consulting, anti-money laundering, accounting and strategic planning. Hubert also chairs the Organisation for Responsible Govern ance’s (ORG) Economic Development Committee. This and other articles are available at www.nlsolu tionsbahamas.com.

Bahamas promoted to Carolina investors

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE Ministry of Tour ism, Investments and Aviation will continue to promote The Bahamas to potential tourists and inves tors through a series of events in North Carolina this week.

The ministry, in a state ment, said its global sales and marketing missions will feature an event in Charlotte on Wednesday, October 19, and conclude on Thursday, October 20, in Raleigh. Both are aimed at boosting visitor arrivals from the area, and are being held one month before year-round direct flights begin from Char lotte and Raleigh to Grand Bahama via Bahamasair.

I. Chester Cooper, deputy prime minister and minister of tourism, invest ments and aviation, will lead a Bahamian delega tion that includes Ginger Moxey, minister for Grand Bahama; Latia Duncombe, acting tourism director-gen eral (ADG), other senior tourism officials; Bahamian hotel partners; sales and trade representatives and destination representatives.

They will all participate in events that include meet ings with key stakeholders and media from across the tourism industry, as well as culturally-inspired evenings at the Marriott Charlotte SouthPark in Charlotte and the Raleigh Marriott City Centre in Raleigh.

Guests will get a taste of Bahamian culture through food and cocktails, plus music and entertainment with a Junkanoo perfor mance. A live question and answer panel will highlight The Bahamas’ growing tourism numbers, plans for

future growth and innova tion, the appeal of its 16 islands and the many rea sons why it is a sought-after destination.

“The ease of travel to The Bahamas from North Carolina makes it a great getaway for south-east travellers,” said Mrs Duncombe.

“We’re looking forward to ensuring that media, travel agents, industry stakeholders and more are aware of the many options there are for direct flights to destinations throughout the islands of The Bahamas. For example, the new direct flights to Grand Bahama with American Airlines from Charlotte launching on November 5, and the new Bahamasair route from Raleigh starting on Novem ber 17.”

With the introduction of Bahamasair’s new direct flight from Freeport to Raleigh-Durham beginning in November, the national flag carrier has partnered with the Ministry of Tour ism. It participated in the North Carolina Wine Fest and the North Carolina State Fair, on October 15 and October 16, to promote the new service.

The global sales and marketing missions kicked off in September in Fort Lauderdale and Orlando, Florida. Upcoming stops include Toronto, Cal gary and Montreal, Canada; and Houston, Texas. The Ministry of Tourism, Invest ments and Aviation will also head to Los Angeles and Atlanta in the future.

Once the visits to key travel hubs have finished, the ministry will visit Latin America and Europe to bring The Bahamas directly to key international mar kets and further drive travel demand for the destination.

PRICE CONTROL EXPANSION

By YOURI KEMP Tribune Business

A FOOD store retailer says The Bahamas is becoming “a dictatorship” after the Government sought to expand the price control regime to a further 38 products without indus try consultation.

Cyril Carey, manager of Kenneth’s food store, told Tribune Business he felt “disrespected” by the Davis administration imposing these changes on his business and the wider industry without warning.

“I was in a Zoom meeting with some of the other food store operators a few days ago and we are deciding

what we are going to do,” he added. The options being considered ranged from legal action to not car rying price-controlled items that retailers would have to sell at a loss, and Mr Carey added: “It is a considera tion right now, but I know because we have a lot of inventory just sitting there that we will need to sell. We may have to ride it out until all of that stock is gone.

“A bit more considera tion needs to be taken by the powers. We are really seeing it hard in business, but everybody feels like because it’s a cash-type business that we make so much money. Everything is about turnover and we’re paying a lot of bills. We have electricity bills and

staff to pay along with busi ness license fees.

“Everything is going up. Sodas prices just escalated in September. Every ship ment that comes in you are seeing a new price,” he added. When you look around the store, nearly 50 percent of what we carry was already under price control. Now they want to talk about feminine napkins and baby formula? This is looking like we are living in a dictatorship now.”

The extent of the price control regime’s expan sion was unveiled in the Price Control (Applica tion to Additional Items) Regulations 2022, which are due to take effect on Monday, October 17, and last for at least six months until April 17, 2023. The

Prime Minister, in unveil ing the move last week, said it was for a six-month trial although there is every pos sibility it may be extended further.

Wholesale margins, or mark-ups, are capped at 15 percent for all 38 product line items listed, while those for retailers are set at 25 percent across-the-board. Those goods impacted, some of which are already price controlled, are baby cereal, food and formula; broths, canned fish; con densed milk; powdered detergent; mustard; soap; soup; fresh milk; sugar; canned spaghetti; canned pigeon peas (cooked); peanut butter; ketchup; cream of wheat; oatmeal and corn flakes.

The remainder are macaroni and cheese mix; pampers; feminine nap kins; eggs; bread; chicken; turkey; pork; sandwich meat; oranges; apples; bananas; limes; tomatoes; iceberg lettuce; broccoli; carrots; potatoes; yellow onions; and green bell pep pers. The regulations were signed on October 12, the same day as the Prime Minister’s speech, by the minister responsible for consumer protection, who is Michael Halkitis, minister of economic affairs.

The retail mark-up for eggs appears to have been increased from the present 10 percent to 25 percent, providing a very modest boost for retailers. But, while the 25 percent maxi mum across-the-board

mark-up is slightly higher than the “general” 23 per cent permitted currently, retailers said the increase was insufficient to offset the expansion of price controls to more products.

The price control regime’s expansion effec tively means merchants and wholesalers will be selling more of their inventory as ‘loss leaders’ where they are unable to recover their cost of sales.

The consequences will likely involve merchants further raising prices on non-price controlled goods, thereby further feeding already-high inflation. And it also provides a disincen tive for retailers to stock price-controlled items, which could result in a shortage of such products.

Hotels give ‘strong support’ on minimum wage increase

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

BAHAMIAN hotel and restaurant employers yesterday gave “strong sup port” to the Government’s minimum wage increase while voicing relief that both they and employees finally have clarity on the issue.

Russell Miller, the Baha mas Hotel Employers’ and Restaurants Association president, in a statement said that while its members - who include major resorts such as Atlantis - “now have the certainty they need” on payroll expense and business operations, they were disappointed not to have been consulted by the Government or more involved in the process.

He added that, fol lowing confirmation the minimum wage is being raised by 24 percent to $260 per week, BHEA members “are relieved that after months of specula tion and pronouncements, the Government of The Bahamas has definitively stated its decision on the

minimum wage increase and when that increase will go into effect for the private sector”.

“The public record will show that the Association has consistently supported the Government’s decision to increase the minimum wage,” Mr Miller con tinued. “With the final decision made, our mem bers reiterate our strong support of this bold step taken by the Government.

“However, the promise of our consultation and involvement in the process was not met, much to our disappointment. Although this exercise was not with out its challenges, the Association is confident that our members now have the certainty they need for the operation of their businesses.

“The Association notes the Prime Minister’s refer ence to a ‘livable wage’. As with the national conversa tion on the minimum wage, we remain committed to being strong, supportive private sector partners to the Government of The Bahamas as the national conversation turns to

what is undoubtedly an important and timely con versation on a ‘livable wage’.”

The Prime Minister announced last week that the minimum wage will increase for private sector workers by $50 per week as of January 1, 2023, taking it from $210 to $260. Over a four-week period, that will translate to an extra $200 for someone on a mini mum wage who is working a 40-hour week.

The hotel industry is among the sector set to be most impacted. Robert Sands, the Bahamas Hotel and Tourism Association’s

‘More latitude’ on lower value contract awards

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

GOVERNANCE

reformers say the pro posed new procurement law grants “more latitude” to ministers and officials in approving higher value con tracts that do not have to go before Cabinet.

Matt Aubry, the Organi sation for Responsible Governance (ORG) execu tive director, told Tribune Business in a recent inter view that the revised “financial thresholds” which determine who approves public sector con tracts “requires us to look a little at the implications of that”.

He explained that while the changes might be designed to ensure govern ment procurement did not become “bogged down” in overly bureaucratic and cumbersome approvals pro cesses, this had to balanced with “a level of oversight” so that all parties involved

president, told Tribune Business up to two-thirds of the hotel industry’s work force may benefit from a minimum wage rise that he agreed was “long overdue” amid hopes the sector’s rising business volumes will offset the extra cost.

The January 2023 imple mentation date gives the industry “sufficient time to prepare” and adjust cost structures, Mr Sands added, but said the mini mum wage cannot be “viewed in isolation” and is part of a broader cost package that needs to be lowered to ensure the tour ism industry’s sustainable development and continued contribution to economic growth.

“We recognise that was long overdue.” Mr Sands said of the minimum wage increase. “We anticipated some increase in the mini mum wage, so this does not come as a total shock. We will have sufficient time to

prepare for it. It is mostly the line staff, entry level service staff for the most part, that will be impacted.

“I think you can say mostly the service area, which represents two-thirds of a hotel’s workforce. Any where up to two-thirds of a workforce in a particu lar hotel and casino will be impacted by this.” Workers in areas such as food and beverage, housekeeping and pool attendants typi cally receive the minimum wage as their base pay, but earn the majority of their income via tips and the 15 percent gratuity.

“Companies will still take a hit on this particular issue, although it was not unan ticipated,” Mr Sands added.

“The real answer is you don’t anticipate this level of increase, but we have always been resilient and it is a testament to our tenac ity that we have weathered seemingly insurmountable challenges in the past.

“We hope business levels continue to grow, we con tinue to grow our business, and that we are able to gen erate incremental business that helps us to navigate the adverse effects of this increase at this point in time.”

Darrin Woods, the Baha mas Hotel, Catering and Allied Workers Union’s (BHCAWU) president, told this newspaper that many resort industry staff impacted by the minimum wage rise will not enjoy the full $260 per week increase because they are not work ing a full 40 hours. Yet, even at 37.5 hours, some impact will be felt.

Suggesting that the increase will help more workers qualify for bank loans, he added: “I agree with the Prime Minister that the increase is long overdue. When we talk about from 2015 to 2022, that’s a long time in terms of having to wait.”

ROYAL CARIBBEAN REVIEWS SMALL BUSINESS PROGRESS

ROYAL Caribbean executives recently visited the Small Business Devel opment Centre (SBDC) to review progress on the cruise line’s nearly-$500,000 investment and reaffirm its commitment to supporting local businesses.

Among those meeting with SBDC representatives were Royal Caribbean International president and chief executive, Michael Bayley; its vice-president of government affairs for the Americas, Russell Benford; vice-president of destination development, Joshua Carroll, and destina tion business development head, Crystal Campbell.

“We continuously survey our guests and the one thing that is clear is that our guests want authentic expe riences,” said Mr Bayley. “They want to meet locals,

taste local food, buy local products, experience local culture and, as a cruise line, we want to empower and support local entrepreneurs in the destinations we visit.”

The Bahamas, which has been a Royal Carib bean destination for more than 50 years, receives more than two million pas sengers from the cruise line. Cherelle Cartwright, the Bahamian entrepreneur who won a pepper sauce competition held aboard one of the cruise line’s ships, has been working through the SBDC - with a mentor developing a busi ness plan and financing - to produce enough to sell at Royal Caribbean’s Perfect Day at Coco Cay private island destination.

Ultimately hoping to generate sufficient pro duction to supply pepper

sauce to serve on the ships, and to stock in the retail stores onboard, Ms Cart wright added: “It’s a dream coming true every day as we get closer and closer to production and distribu tion. I still can’t believe it.”

Her dream does not stop with her Mama Sassy’s pepper sauce – she’s look ing at a TV cook-off series and the possibility of hold ing such an event onboard a cruise vessel.

ROYAL Caribbean’s Crystal Campbell, left, its destination busi ness development head, and Russell Benford, vice-president of government relations for the Americas, talk with Cherelle Cartwright, creator of Mama Sassy’s Pepper Sauce who, with the help of the Small Business Development Centre (SBDC) and funding by the cruise line, is about to launch her product to millions of passengers at its Perfect Day at Coco Cay private island in the Berry Islands.

Samantha Rolle, SBDC’s interim executive direc tor, said Royal Caribbean International’s grant pro gramme paved the way for nearly $100,000 in fund ing for small businesses, while the Kickstarter pro gramme is facilitating some 100 entrepreneurs who will undergo an eight-week boot camp series to prepare for success.

Many of the participants are in Grand Bahama or Abaco, where the Govern ment is matching Royal

‘MORE LATITUDE’ ON LOWER VALUE CONTRACT AWARDS

have confidence in the award’s integrity.

Mr Aubry told this news paper that the revised Bill, which is designed to replace the Act introduced by the Minnis administra tion, “puts a lot of power in the hands of the min ister” responsible for the agency running the bid ding process. Under the previous Act, they can

approve contract awards valued between $50,000 and $250,000, but the Bill tabled in Parliament yesterday has expanded these thresh olds to between $25,000 to $400,000.

The Prime Minister told the House of Assembly this was intended “to pro vide greater flexibility and transparency to ensure pro curing entities can operate and enter into agreements efficiently and swiftly”.

Meanwhile, contracts worth between $400,000 and $2.5m can now be approved by the seven-person Public Procurement Board, when the previous threshold was between $250,000 and $1.2m.

It is only contracts worth $2.5m and above that now have to be scrutinised and approved by the Cabinet once it receives the Board’s recommendations. Else where, Mr Aubry said he

was unclear what the chal lenges had been to the Government publishing all contract awards, including the name of the winning bidder and the value, within 60 days of the decision being taken.

The same requirements are contained in the new Bill, although extra lan guage has been added to state that the award of a contract for the provision of “goods, works and ser vices” must be declared publicly within 60 days. Mr Aubry questioned whether this represented a carve-out of certain types of contract award from the disclosure requirements, although this was not clear.

The Davis administration has branded the current Public Procurement Act as unworkable in prac tice because it imposes too many onerous and bureau cratic requirements on government to the point where it cannot function efficiently. However, it has not published details on the winning bidders, the nature of the contract, and the total amount awarded for all government contracts issued between September 1 and end-July 2022 as the law stipulates.

The existing Act presently requires the Government and all its ministries, departments and agencies to publish - within 60 days of every contract award - the winning bidder’s name and address; contract amount; bid title; name of the procuring entity; and

bidding method used. This means that all government contracts awarded up to August 6 should now have been publicly declared, but none have.

The Davis administration has argued that its prede cessor’s failure to follow the necessary public ser vice protocols, and appoint a chief procurement officer to oversee the Act’s imple mentation, meant it is impossible for the Gov ernment to reveal these contract details. However, Tribune Business’ analysis of the present Act did not reveal anything to suggest disclosure hinges on such an appointment.

The Public Procurement Act, passed by Parliament under the former Minnis administration and brought into effect on September 1 last year, was intended to end the patronage system that has dominated the awarding of government contracts for decades with bids going to political sup porters, family, friends, lovers and others with the right connections as opposed to being issued on merit.

Implemented just two weeks before the gen eral election, it was also intended to bring greater transparency and effi ciency to the millions of dollars awarded in public sector contracts annually by having the process held out in the open. And, especially given the country’s present fiscal challenges, the law was designed to generate

Caribbean’s funding for those recovering from Hurricane Dorian or pan demic-related shutdowns. All are in tourism enter prises or tours.

“We want our par ticipants to think of opportunities that lie ahead, a career path, the market dynamics, financial literacy, legal and govern ment procedures and best business practices,” said Ms Rolle. “They come in with a dream and we want them to leave with working knowl edge and a plan.”

MATT AUBRY

value for money for Baha mian taxpayers by ensuring the best bidder won the contract, thus reducing if not eliminating any wastage and corruption.

However, the Act has been the subject of an intense political battle for much of the past year which culminated in last week’s threat by the Opposition Free National Movement (FNM) to initiate a Judi cial Review legal action in the Supreme Court over the Davis administration’s alleged violations of the Act by failing to publish details of contract awards.

However, the Davis administration has argued that the legislation is overly-bureaucratic and cumbersome, making it unworkable in practice. It says this has ensnared simple purchases in red tape, and added to costs and inefficiency. It also pointed out that the accompanying regulations and guidance notes, and multiple other requirements needed to give the law effect, were never put in place.

WORKERS at an Apple store in Oklahoma City voted to unionize, marking the second unionized Apple store in the U.S. in a matter of months, according to the federal labor board.

The vote on Friday sig naled another win for the labor movement, which has been gaining momentum since the pandemic.

Fifty-six workers at the store, located at Oklahoma City’s Penn Square Mall, voted to be represented by The Communications Workers of America, while 32 voted against it, accord ing to a preliminary tally by National Labor Relations Board. The approximate number of eligible voters was 95, the board said. The labor board said Friday that both parties have five busi ness days to file objections to the election. If no objections are filed, the results will be certified, and the employer must begin bargaining in good faith with the union.

The union victory follows a vote to unionize an Apple store in Towson, Maryland, in June. That effort was spearheaded by the Inter national Association of Machinists and Aerospace Workers in Maryland, which is preparing to begin formal negotiations.

Photo:Cay Focus Photography/DPA

MAIN STREET VERSUS WALL STREET

We are living through a phase of divergence between the interests of the real economy and those of investors in the financial markets. What is good for Wall Street is bad for main street, and vice versa. This dissociation between our everyday lives and those of high-flying investors is bad for the reputation of the markets, exacerbating the resentment of those who believe that a global elite is taking everyone else for a ride.

Such views are harsh. Financial markets play a positive role in the econ omy. For example, they allow companies to raise funds by issuing shares, while also providing a credible venue for the negotiation of essential commodities transactions, such as oil or wheat.

What the markets are now experiencing is the hangover of a decade of growth, which came on

the back of a gargantuan monetary stimulus. In the aftermath of the finan cial crisis of 2008, interest rates remained low, and liquidity fresh off the money printers kept being injected into the system.

Then the COVID-19 pan demic hit, and this dynamic intensified. Eventually, towards the end of 2021, inflation started to appear on the radar of monetary policymakers and the party came to an end. Interest rates rose and asset pur chases stopped.

The global monetary authorities are now on a mission to control infla tion, and several senior officials have admitted to being ready to sacrifice eco nomic growth and jobs. The result has been a drop in

risk appetite among traders, with the S&P500, the main US stock market index, dropping almost 25 percent relative to its all-time maxi mum reached in January 2022.

There is a perverse angle to this story. Traders find themselves wishing for bad news in the real economy. They long for the higher unemployment and slower growth that will bring infla tion down. Because that is when the Federal Reserve will stop hiking interest rates.

Traders and investors are not evil. They just do not want to see the value of their portfolios drop, which is what happens when the Fed withdraws stimulus, driving flows away from risky assets such as stocks

and into to refuge assets, such as cash and gold. This is precisely what has been happening recently, and is likely to continue well into 2023.

To put it crudely. Cen tral banks are trying to bring inflation down by breaking the economy. It is ironic that what is forcing the hand of policymakers is the vitality of the econ omy. In several countries such as Germany, Japan,

France, Canada and others, the unemployment rate has never been lower. Unfor tunately, such a strong jobs market is supporting high levels of inflation.

By withdrawing stimulus and hiking interest rates, policymakers will ruin this stellar labour market and most probably trigger a recession. But such is the price to pay for ensuring that consumer prices do not continue to rise and

eventually lead to an even worse outcome.

This is, of course, a temporary conundrum. Inflation will eventu ally drop, and growth will resume. When that time comes the interests of the markets will once again be aligned with everyone else’s. The next cycle of growth will come, and the economic expansion will drive a recovery in the markets.

OFFICIALS INSPECT NEW BERRY ISLANDS AIRPORT

TOURISM officials inspect the new Berry Islands airport that is set to open at year’s end. Dr Kenneth Romer, deputy director general at the Min istry of Tourism, Aviation

and Investments, and acting director of avia tion, led a delegation on an inspection and assess ment of the newly-built terminal last Thursday. He was accompanied by

Bahamas Airport Author ity chairman, Paul Bevans, its general manager, Peter Rutherford, and other officials.

BEAR ON WALL STREET

Photo:Kemuel Stubbs/BIS

The Bahamas’ top two life insurers downgraded

‘bb+’ (Fair) from ‘bbb-’ (Good).

The A. M. Best actions show there are real conse quences for The Bahamas, its economy and the com panies that operate in it as a result of the continual downgrades to the country’s creditworthiness from the likes of Moody’s and Stand ard & Poor’s (S&P). They also came just days after Mr Ward warned this nation needs to take practical steps to show the rating agencies it is making the necessary fiscal and economic struc tural reforms.

“Any downward pressure on the rating of the coun try puts it in a category of country where more risk is involved in making invest ments in that territory,” the Bahamas First chief told Tribune Business of the Moody’s downgrade. “It just gives the over all impression... there are more inherent risks in the

economy that could prove dangerous to companies operating there.

“I think rating agencies like A. M. Best will moni tor the situation. They have a view to what that means, and it could have an impact on their assessment of country risk on an overall basis. The starting point for a rating is the country’s own underlying financial condition.

“I think we’re concerned about it. What we’re more concerned about is there needs to be concrete steps taken to improve the overall environment that satisfies the rating agencies we’re headed in the right direction.”

Mr Ward said he was not yet concerned about having to take provisions against, or discount, Baha mas First’s own holdings of government debt as a result of the continual down grades “although that is a potential danger if we go too far down this scenario

In France, fuel crisis frays nerves and workers' resilience

where the country gets downgraded”.

Moody’s pushed The Bahamas further into socalled ‘junk’ status by cutting its sovereign cred itworthiness from ‘Ba3’ to ‘B1’ on the basis that its access to borrowing on the international capital mar kets is being squeezed by a combination of global interest rate rises, increased emerging market spreads and concerns about its own fiscal condition.

Mr Ward said the exist ence of such a squeeze was “probably true”, but was not The Bahamas’ fault.

He added that the country was especially vulnerable to natural disasters and, as a result, the Government’s “headroom is getting less and less” because of having to constantly step in with “emergency funding” for post-hurricane rebuilding.

Both Family Guardian and Colina are among the largest sources of long-term investments and savings in

By JOHN LEICESTER Associated Press

EVEN close to mid night on a school night, the tipoff was too impor tant to ignore: A nearby

The Bahamas, holding hun dreds of millions of dollars in government bonds and other securities on the bal ance sheets as they seek to match long-term assets to liabilities.

A. M. Best, in down grading Family Guardian and Colina, made clear its decision was based on external sovereign factors rather than issues with both companies. Colina, in a statement responding to the move, said: “Colina’s con tinuing investment strategy includes, but is not limited to, acquiring long-term sovereign debt securities as these assets provide the best asset/liability matching.

“Moreover, the com pany’s investment options are limited by the coun try’s exchange control regime. Colina’s invest ments in The Bahamas’ sovereign debt comprise a significant proportion of the company’s total assets, and the country’s downgrade has negatively impacted its

gas station had just been resupplied.

So Aicha Far scooped up her 6-year-old and set off into the night. The home carer needed to refuel her car so she could continue looking after the vulner able people on the outskirts of Paris who rely on her to keep them fed, clean and safe. The prospect of a full tank was worth dragging the kid out of bed for.

"I wrapped him in a blanket and put him in the back," Far recalled on Sat urday, as she gently coaxed an older woman she looks after to drink her breakfast hot chocolate.

A. M. Best rating. However, Colina still considers The Bahamas’ sovereign obliga tions as creditworthy.”

In its assessment of Family Guardian, A. M. Best said: “The rat ings reflect Family Guardian’s balance sheet strength, which A. M. Best assesses as strong, as well as its strong operating per formance, neutral business profile and appropriate enterprise risk management (ERM).

“The balance sheet strength assessment reflects Family Guardian’s riskadjusted capital at the strong level, as measured by Best’s Capital Adequacy Ratio (BCAR), the elimi nation of financial leverage and continued good liquid ity, which is offset partly by the company’s limited investment options and high concentration of sov ereign debt holdings. The company’s BCAR levels declined in the past year

the French energy minister said. In the Paris region, the number was above a third.

Motorists have some times lined up for hours to refuel — not always suc cessfully — and tempers have flared.

In the town of Ver sailles, southwest of Paris, 41-year-old nurse Aurelie Martin is trying to eke out the precious fuel left in her tank — and bracing for the next time she'll have to visit the pumps. She is up well before dawn to give jabs, change dressings and dispense other essential medical care to dozens of patients each morning.

due to downgrades of the Bahamas’ sovereign ratings.

A. M. Best added: “Family Guardian’s operat ing performance remains strong, with return on equity levels consistently over 10 percent and a con tinued trend of positive net earnings, which have sup ported capital growth.

“The business pro file assessment considers Family Guardian’s good market position in The Bahamas and credit worthy product offerings offset by its geographic concentration in The Baha mas. The company’s ERM framework and governance structure are appropriate for its risk profile.

“There are ongoing con cerns regarding global economic conditions and their negative impact on The Bahamas. A. M. Best will continue to monitor the economic conditions in The Bahamas and take appropriate rating actions as they change.”

Saturday. "I had hoped up to now that the situation would improve, but unfor tunately it doesn't seem to be getting better."

said parcel of land is more accu rately described as follows:

at a point (hereinafter referred to as the point of origin)

268, 838.659 (m) running in a direction of N 99 33' 10" for a distance of One Hundred (100

point, thence in a direction of N 189° 33' 10" for a distance of Seventy(70.00)

to a point, thence in a direction of N 279 33' 10" for a distance of One Hundred (100.00) Feet to a point, thence in a direction of N 09° 33' 10" for a distance of Seventy{70.00) Feet to the point of origin.

The said lot of land is bounded on the North by Lot No. Fifty-three (53) of the said subdivision, which is said to be the property of Stephanie Ferguson on the EAST by Lot No. Four (4) of Yamacraw Shore Subdivision ownership which is unknown on the SOUTH by Lot No. 55 of the said subdivision. which is said to be the property of Stephen and Ladonna Hudson and on the WEST by a public road reservation known as Cat Island Avenue.

The said lot of land has such position, shape, dimensions and boundary marks as shown on plan.

AND

IN THE MATIER of the Quieting Titles Act 1959 AND IN THE MATIER of the Petition of CANDICE DIONNE DAVIS AND PATRICIA ANN JOHNSON

NOTICE

THE PETITION OF CANDICE DIONNE DAVIS AND PATRICIA ANN JOHNSON in respect of:

IN THE MATTER OF ALL THAT piece parcel or lot of land (hereinafter referred to as the said parcel of land) containing by admeasurement Seven Thousand (7,000) Sq. Ft. or thereabout being designated Lot No. Fifty-four (54) in the subdivision known as "Yamacraw Beach Estates" recorded in the Department of Lands and Surveys as File No.P8/20 and situate on the eastern side of Cat Island Avenue and approximately 70 ft. south of Berry Avenue in the Eastern District of the Island of New Providence in the Commonwealth of The Bahamas. The said parcel of land is more accurately described as follows: Commencing at a point (hereinafter referred to as the point of origin) coordinated N 2.769, 404.874 (m) E 268, 838.659 (m) running in a direction of N 99 ° 33' 10" for a distance of One Hundred (100.00) Feet to a point, thence in a direction of N 189 ° 33' 10" for a distance of Seventy (70.00) Feet to a point, thence in a direction of N 279 ° 33' 10" for a distance of One Hundred (100.00) Feet to a point, thence in a direction of N 09° 33' 1O" for a distance of Seventy (70.00) Feet to the point of origin.

The said lot of land is bounded on the North by Lot No. Fifty-three (53) of the said subdivision, which is said to be the property of Stephanie Ferguson on the EAST by Lot No. Four (4) of Yamacraw Shore Subdivision ownership which is unknown on the SOUTH by Lot No. 55 of the said subdivision, which is said to be the property of Stephen and Ladonna Hudson and on the WEST by a public road reservation known as Cat Island Avenue. The said lot of land has such position, shape, dimensions and boundary marks as shown on plan.

CANDICE DIONNE DAVIS AND PATRICIA ANN JOHNSON

Court of

Chronic fuel shortages in France sparked by strikes and panic buying are fray ing nerves and testing both the resilience and ingenuity of millions of French work ers who depend on their vehicles to do their jobs.

More than a quarter of gas stations nationwide were still without one type of fuel or more on Saturday,

Rather than doing little hops in her Mini from one patient to the next, she's increasingly scurrying on foot between them when she can, racking up 10 kilometers (six miles) of walking each morning to save fuel.

"I'm doing the bare mini mum by car," she said as she made her rounds on

The strikes have hit French refineries and fuel depots. Strikers have demanded higher wages from what they feel should be their share of windfall profits generated by high oil and gas prices amid the global energy crisis aggra vated by Russia's war in Ukraine. After runs on toilet paper, pasta and other essentials at the height of the COVID-19 pandemic, fuel and where to find it are the latest obsessions in France. The govern ment has urged motorists not to panic-buy. Some gas stations have banned jerrycans.

When Martin bumped into other nurses also making their early morning rounds on Saturday, gaso line was the first thing they talked about.

CLEMENTT.MAYNARD&

Union chief says: ‘Don’t encourage mediocrity’

in an insensitive manner, that should be dealt with,” he argued. “But one thing I have told the union lead ers they should not do is encourage mediocrity. It’s not good for the employer, it’s not good for the worker.....

“We’re trying our level best. We’re not going to get everything we want when we want it but we’ll take it block by block, piece by piece, corner by corner until we get there. We’re trying to work through industrial agreements as quickly as we can. Some are not going as expeditiously as we’d like but there’s a commitment to getting them done.”

Pointing to the public sector industrial deals nego tiated during the first year of the Davis administra tion, Mr Ferguson added: “I think we’re on the right track and we’ll keep our focus on the economy. If the hen is not there, we’re not going to get any eggs. The economy is critical. We need that to function and, when that is up and going, and everything is moving

along, we will make sure everything gets done.

“As long as there is a willingness to sit down and discuss.... The employer wants the best for his busi ness, a reasonable return on his investment, and the worker wants a return on the work he has put into the organisation. It’s an equal argument that can easily be resolved if both parties enter into discussions to negotiate in good faith.”

The TUC president added that he was seeking to reduce industrial agree ment negotiations to the main, controversial issues such as salaries, benefits and productivity clauses, rather than spend time going through parts that both sides know they can live with.

“You have industrial agreements of 45 pages. What seems to take a long time is the union and employer go through 45 pages and there is abso lutely nothing wrong with them,” Mr Ferguson added. “It takes hours, days, months and years to get through when there are

really only three sections of that agreement that have major concerns and require attention.

“That takes a long time, lengthening negotiations and creating expectations. You’re dealing with wages, you’re dealing with pro ductivity, you’re dealing with medical insurance. Get down to the sticking points as quickly as possible so the country and economy can remain stable and united.”

Mr Ferguson last week asserted that the labour movement will push for a further minimum wage increase to $300 per week once the economy has rebounded “in a strong way”. He told Tribune Busi ness he “sees no reason” why the unions should not advocate for such a rise once The Bahamas has fully recovered from the devastation inflicted by COVID-19 while affirming that achieving a “livable wage” remains the ultimate goal.

He conceded, though, that the latter is a long-term objective that will likely take many years to reach.

And the TUC chief also agreed with the Bahamian private sector that, rather than increase the minimum wage by large increases at infrequent intervals as has been done to-date, it should instead be indexed to the cost of living and raised annually by an amount equal to local inflation.

These smaller increases would be more digestible, and easier for Bahamian businesses to swallow in their payroll expenses, with Mr Ferguson yesterday saying that increased employment and the wider economy’s welfare remain the union movement’s immediate priority.

Trade unions had pushed for a $300 weekly mini mum wage, representing

a 42.9 percent increase to the private sector’s $210, in negotiations over the latest increase but the Gov ernment opted for $260 - as Tribune Business exclu sively revealed it would back in late August.

Signalling that organ ised labour, at least for now, is satisfied with the $50 per week or 24 per cent increase, Mr Ferguson told this newspaper: “We recognise that the state of the economy is such where there is only so much it can take, and we’re going to work with the Government in that regard.

“When the economy begins to turn around, and turn around in a strong way, we’d seek to have those fig ures revised. Our concern

principally is to have as many workers employed as possible. We know how many of our workers and members have been employed, unemployed and are still unemployed.

“As the economy moves, we expect that figure to be enhanced and brought to a level that’s acceptable.” The TUC president indi cated the union movement will begin agitating for an increase, which will take the minimum wage to $300 per week or $1,200 per month, once 90 percent of the Bahamian workforce is gainfully employed - mean ing that the jobless rate is around 10 percent, which is close to official figures just prior to the COVID pan demic’s start.

Small businesses brace for cautious holiday shoppers

By MAE ANDERSON AP Business Writer

SMALL businesses are stocking the shelves early this holiday season and waiting to see how many gifts inflation-weary shop pers feel like giving.

Holiday shopping was relatively strong during the past two years as shoppers flocked online to spend, aided by pandemic stimulus dollars. Sales in November and December have been averaging roughly 20% of annual retail sales, accord ing to National Retail Federation, making the holiday season critical for many retailers.

This year, small busi nesses are bracing for a more muted season, as some Americans spend more cautiously. AlixPart ners, the global consulting firm, forecasts that holi day sales will rise between 4% to 7%, far below last year's growth of 16%. With inflation running above 8%, retailers would see a decrease in real sales.

To prepare, owners say they're ordering inventory earlier to avoid the supplychain snags that frustrated them the past two holiday seasons and to draw in early

birds. They're stepping up discounts as much as they can in the face of their own higher costs. And owners also hope more people will shop in stores and holiday markets after doing more of their shopping online during the pandemic.

Max Rhodes, CEO of Faire, an online mar ketplace used by small businesses to sell their wares wholesale as well as buy goods for retail shops, said he's seeing earlier ordering from merchants who for two years had trou ble getting enough holiday inventory stocked in time for Christmas. Stores faced shortages of everything from holiday décor to gift items as COVID-19 lock downs forced factories to shut, costs rose and fewer shipping containers and truckers were available -all causing delivery snarls.

A study for the Council of Supply Chain Management Professionals by global con sulting firm Kearney found U.S. business logistics costs surged 22.4% in 2021 to $1.85 trillion.

"There's a bit of a hango ver from that, a bit of fear," Rhodes said. While it's too early for sales data, the term "Christmas" was the

NOTICE

NOTICE is hereby given that ALECSSANE MARC-LEORAND of P. O. Box CR-54802, Carmichael Road, New Providence, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 17th day of October, 2022 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

the site in mid-September. That's two weeks earlier than last year, and eight weeks earlier than 2020, Rhodes said.

"The one thing we're cer tain of is it's not going to be predictable … We really don't know what to expect and our retailers feel the same way," Rhodes said .

Mat Pond operates The Epicurean Trader in San Francisco, including four brick-and-mortar stores, an online shop and a corpo rate gift basket business. In past years, he started build ing inventory in November, but this year he's already stocking up on items such as gourmet food, chocolate, wine and giftware. He's seeing corporations order holiday gift baskets earlier as well.

"Everyone's planning ahead," Pond said. "I think everybody's learning from the past two years."

While the pandemic's

economic impact has sub sided somewhat, consumers are now being tag-teamed by high inflation and rising interest rates. Over all, spending has held up, although some Americans have been forced to pull back on discretionary items. Any decline can be mean ingful because consumer spending makes up 70% of economic activity.

Hannah Nash, the owner of the online jeweler Lucy Nash, expects sales of her earrings, bracelets and other jewelry to slow after two years of strong growth. The main culprit: inflation.

"There is less money going around to the average person and we expect their living expenses to impact how much they can spend on holiday shopping," Nash said.

Nash also expects more people to shop in stores during these holidays. She

started her business, based

event in July, according to the data group Numerator.

Some business owners are hoping to take advan tage of any shift to shopping in holiday markets and in stores.

Kimberly Behzadi oper ates Read It & Eat Box in Buffalo, N.Y., which sells themed boxes with food and a book in each box. She started the business in 2020, during the pandemic. She has an online shop but is hoping the return of holiday markets to full capacity will boost sales. She depends a lot on the holidays — 40% of her annual revenue comes between October and December.

She's planning on being at six markets this year, with two more applications pending.

in Indianapolis, during the pandemic, when online shopping boomed. The per centage of total retail sales done online jumped from 11.5% in 2019 to 17.7% in 2020, then rose again to 18.8% last year, according the Mastercard Spending Pulse, which tracks all kinds of payments, including those by cash and debit card.

Nash is stepping up dis counts and offering bundles to attract shoppers: Her plans include a 15% dis count for new customers this year, up from 10%, starting in November. And she'll offer bundles of prod ucts that are about 20% cheaper than buying items separately.

Major retailers such as Amazon and Walmart are also offering holiday deals to cash-strapped Americans earlier this year. Amazon held a two-day discount event on Oct. 11-12 where the average order was $46.68, $13 less than what shoppers spent during the company's Prime Day sales

"Last year, holiday mar kets were still limited by the necessary safety protocols for Covid-19 ," she said. "This year, gratefully, we are able to attend and sell at more holiday markets locally, so my expectation is to double my holiday rev enue this year."

Behzadi also plans on being more promotional.

"With inflation rates high this year I expect consum ers to be looking for deals, so I have adapted my holi day strategy to include more bundles and deals," she said. She's offering a $60 box that's bundled with a blind-date book worth $25 for Black Friday, for example.

Mariana Leung-Wein stein sells alcohol infused jam and marshmallows and other farm-inspired gifts at about 25 stores via her Wicked Finch Farm brand in Pawling, N.Y. that she started in 2019. She's focus ing on stocking up in stores in case online sales slow.

"I expect people will enjoy seeing and touching things in person this time around, which puts more of my focus in getting my products in physical stores in time for the holidays," she said.

0.3690.26023.82.96%

0.00%

0.1840.12019.43.36%

0.4490.22018.32.67%

N O T I C E

SAPURAOMV UPSTREAM (MALAYSIA) INC.

Creditors having debts or claims against the abovenamed Company are required to send particulars thereof to the undersigned Andrew Davies of Crowe Bahamas Harbour Bay Plaza, Shirley Street, Suite 587, P.O. Box AP-59223, Nassau Bahamas Email andrew.davies@crowe.bs on or before 14th day of November, A.D., 2022. In default thereof they will be excluded from the benefit of any distribution made by the Liquidator.

Dated the 17th day of October, A.D., 2022.

Andrew Davies Liquidator

Harbour Bay Plaza, Shirley Street, Suite 587, P.O. Box AP-59223, Nassau, Bahamas

most searched for term on

HANNAH

Photo:Darron Cummings

the final orders below,” Mr Heastie wrote. “Our ‘set tled’ price was below the maximum premium price granted to the IDB. These new hedges allow BPL to have a fuel charge at/or below 11.5 cents per kilo watt hour through March 2024.”

That 11.5 cents, which is 58 percent less than what BPL proposes to levy at next summer’s peak when consumption is highest, also matches the charge GB Power plans to levy on its own customers in their November bills. GB Power’s success at fuel hedging, and maintaining relative fuel and overall electricity price stability for its customers over an eight-year period since 2014, is likely to raise uncomfortable questions for BPL and the Government as to why they cannot do likewise.

And the Grand Bahama energy provider’s recent success, in being able to lock-in and hedge 80 per cent of its 2023 fuel needs at $51 per oil barrel, may also cause some to wonder why BPL has not sought to reenter the market with global market prices starting to slowly come down.

The Government and BPL have repeatedly said the initial fuel hedging

structure, put in place by the Inter-American Develop ment Bank (IDB), remains in place. That is correct, as the December 2020 hedge executed by the IDB cov ered a total 3.565m barrels of oil for BPL that were priced at $40 each and split into three tranches.

This transaction hedged 80 percent of BPL’s fuel needs for 2022, 50 percent of its requirements for 2023, and 25 percent of 2024’s needs via the IDB’s upfront hedge. These were were not hedged 100 percent because BPL needed to monitor global oil price movements so that it did not end up hedging at a price above market costs and thus end up losing money.

The Government, though, is not giving the full story. BPL was supposed to “back fill” the original IDB hedge by purchasing the extra fuel volumes to fully address its needs. This was to be done via a series of trades, known as call options, that would have enabled BPL to obtain fuel - covering the 20 percent balance for 2022, 50 percent for 2023 and 75 percent for 2024 - at prices below then-prevailing oil market rates had they been executed.

It was these trades, sched uled to have been executed in tight windows in Sep tember 2021 and December 2021 just after the Davis

administration took office, that were not carried out.

As a result, BPL has increasingly been buying fuel at higher market rates with the fuel charge artifi cially held at 10.5 cents per kWh via the combination of government subsidies and Shell non-payment. This can no longer be sustained, and consumers must pay up as a result.

While not wishing to become caught up in the political controversy over BPL’s fuel hedging and prices, Mr McGregor told Tribune Business he “cannot help but take a look across the ocean” after GB Power unveiled a relatively minor increase (in comparison to BPL) in the fuel charge on customer bills from 10 cents to 11.5 cents per kWh with effect from November 2022.

“We tried to hold off for as long as we could,” Mr McGregor explained, saying the increase was due to higher fuel prices, “and we avoided the summer season when bills are highest, held our breath and tried to scrape through, but we need to start collecting for that.

“We’re quite pleased. Nobody likes to see their bills going up, but the good news here is the hedging programme continues to deliver value and we’ve kept our eye firmly on that ball. We’ve been watching the oil markets every day.....

We could have bought oil at $99 per barrel during the summer but that wasn’t going to help anyone.

“We monitor it every day, and had an opportunity a few weeks ago to hedge and lock in 2023. We hedged 80 percent at $51 a barrel..... Who can argue that $51 a barrel is not a good deal? Eighty percent at $51, we’re really pleased we executed that and it’s really going to benefit our customers next year.”

Mr McGregor acknowl edged there was always “a degree of apprehension and suspicion mixed in” when an electricity utility such as GB Power initiates a fuel hedg ing initiative. This stems from fears it might end up on the wrong side of the global oil markets, locking in fuel purchases at a higher price than where spot rates move “and looking like idiots”.

However, over the past eight years GB Power has “ended up on the positive side” through leveraging the expertise of its Canadian parent, Emera, and working with its regulator, the Grand Bahama Port Authority (GBPA). Mr McGregor pointed out that Emera’s Barbados operation had been prevented from hedg ing its fuel purchases by the regulator there, result ing in customers facing fuel

charges as high as 30 cents per kWh.

“I’m just really glad we were allowed to do it back in 2014,” he added. “Who else has managed to lock in a fuel price at 10 cents per kWh from 2016 to 2021” and through almost to year-end 2022? While unable to give a dollar figure for total cus tomer savings as a result of fuel hedging, Mr McGregor said: “The true savings have been over the last few years where customers have saved enormously.

“We said if we hadn’t hedged fuel costs would be 18 cents or higher.” The GB Power chief added that the utility had flexibility to respond to global oil market changes, including sudden and substantial price drops, by leaving 20 per cent of its fuel needs un-hedged and purchasing them at the pre vailing spot rate.

Explaining that higher global oil prices have forced the fuel charge increase from 10 cents to 11.5 cents per kWh from November 1, 2022, Nikita Mullings, GB Power’s chief operating officer, said in a statement: “With GB Power’s fuel purchase strategy, or fuel hedging programme, we have been able to protect customers from global price volatility as the cost of oil has risen this year...

“We know there is never a good time for a rise in

costs, and these are particu larly difficult times for many Grand Bahamians. Without hedging, fuel costs would be at about 18 cents per kWh. For 2023 we’ve managed to hedge our fuel costs at less than $51 a barrel.

“Based on current market trends, the fuel charge for 2023 should range between 12 to 14 cents per kWh. It’s clear our fuel strategy con tinues to benefit customers despite the unprecedented rise in global oil prices. With the continued price volatility, we will be com municating regularly with customers on fuel costs. Beginning in November and every month thereafter, we will be advising customers of the fuel cost monthly.”

GB Power said that with the November 1 increase, a residential customer consuming 350 kWh per month will see the fuel portion of their bill rise by approximately $5. It added that fuel costs are a direct pass-through to cus tomers, and the company does not benefit in any way from the fuel charge.

“We want to encourage customers to be mindful of energy use and to consider adopting habits such as lim iting air conditioning use, turning lights out and lower ing hot water consumption to help manage monthly electricity costs,” added Mrs Mullings. “At the end of the month, every effort to con serve is meaningful.”

almanac

tiDes For nassau

a.m. 2.2 7:40 a.m. 1.2

p.m. 2.8 8:51 p.m. 1.3 2:41 a.m. 2.2 8:42 a.m. 1.3 3:11 p.m. 2.7 9:48 p.m. 1.3

3:43 a.m. 2.3 9:45 a.m. 1.3

p.m.

a.m.

p.m.

12:23 p.m.

12:43 a.m.

1:08 p.m.

No sanctions over price control ‘death warrant’ execution

Mr Beneby told Tribune Business the Davis admin istration’s expanded price control regime and new mark-ups as they stand are the equivalent of “ suicide mission” for both food retailers and wholesalers.

Disclosing that these con cerns are shared by stores of all sizes, “from Grand Bahama to Inagua”, he revealed another merchant said the proposal was such that the sector “might as well give the Government the key to the stores” and simply hire the private sector to manage them on its behalf.

“That is the position we have taken,” Mr Beneby told this newspaper of the refusal by the Association and its members to imple ment the new price controls from today, as stipulated in the Price Control (Applica tion to Additional Items) Regulations 2022.

“The proposal, for the retail grocers and whole salers, would put us on a suicide mission. We cannot sign our own death warrant. That’s what we’d be doing. It’s not just coming from retail grocers in Nassau; it’s coming from grocers all over the country; from Grand Bahama to Inagua. They’re not happy with it, and are not going to comply with it.

“We’re chatting with all of them. Abaco, Eleuthera, Long Island, you name it. That is where the whole argument comes from. No one was consulted; every one was blindsided. In the Family Islands, they said they knew nothing about it. Some heard it on media, some heard it in various [social media] chat groups; some on Facebook. Some only heard it for the first time on Friday or Saturday.

The price control regime’s expansion effec tively means merchants and wholesalers will be selling more of their inven tory as ‘loss leaders’ where they are unable to recover their cost of sales. The consequences will likely involve merchants further raising prices on non-price controlled goods to com pensate, thereby further feeding already-high infla tion. And it also provides a disincentive for retailers to stock price-controlled items, which could result in product shortages.

Mr Beneby yesterday voiced disappointment that the Government had not consulted food retail ers and wholesalers first before deciding that more price controls were the best policy response to the infla tion and cost of living crisis squeezing many Bahami ans. He argued that such discussions could have pro duced alternative, better options to achieve what the Government is seeking rather than endangering the industry and the thousands of jobs that rely upon it.

The sector is due to meet the Prime Minister over the matter tomorrow, and Mr Beneby told Tribune Business that items such as chicken and turkey spin-off into multiple product varie ties - the latter giving rise to patties, drumsticks, wings, ground turkey and turkey meat just to name a few. As a result, the expanded price control regime quickly morphs into more product

lines than just the 38 cited by the Government.

Selling all those at a loss is “a death warrant. We cannot survive. You’re going on a suicide mis sion”. The Association chief added: “It all hinges on what happens at the meeting. We just hope they would hear us, and we can try and work out some kind of amicable conclusion.

“You cannot kill the industry trying to accom plish whatever it is you’re trying to achieve. You’re killing one segment of the industry trying to appease the next. You cannot do that. What happens is that you’ll have thousands of people out of jobs and you can multiply that by several thousand people again in terms of those going to be affected.

“Like the saying goes, small businesses are the engine that drives any econ omy and we cannot afford to put small businesses out of business. I don’t think that’s the intent but that is what’s going to happen and will happen with this present proposal as is. That’s exactly what’s going to happen,” Mr Beneby continued.

“As one merchant said, that proposal as is, we might as well give them [the Government] the key to the stores and tell them just pay us to manage the stores. They’ll be the sup plier and we’ll manage the stores for them and just pay the rent for the properties.”

Mr Beneby added that “the numbers are being crunched” in terms of the negative financial impact that the expanded price control regime will have on the industry and individual businesses, and the results will be presented to the Prime Minister at tomor row’s meeting.

In his letter to the Prime Minister, he called for the proposed price control changes to be suspended to give all parties a chance to work out a solution better able to satisfy the needs of consumers, the private sector and the Government.

“The effect of this uni lateral decision will be devastating to our mem bers, especially the owners of smaller family-owned and Family Island stores who provide a vital and essential service to per sons living throughout our country,” Mr Beneby wrote. “The expansion has been announced without any form of consultative pro cess and the vast majority of our members are finding themselves without proper and due notice.

“Had there been con sultation, the Government would have been seised of the fact that the proposed expansion of the price con trol basket will result in 40 percent to 60 percent of our sales volumes falling under price control, which would make many of our small to mid-sized businesses’ oper ations unfeasible.

“An allowed mark-up of 25 percent will, in most cases, result in a net margin of less than 15 percent after we account for the cost of doing business inclusive of losses, pilferage and Busi ness Licence fees. The fixing of profit margins is frightening, and not reflec tive of a free and open market system.”

Mr Beneby said the price control regime’s expan sion was coming when food retailers and wholesalers are being asked to absorb a 24 percent increase in the minimum wage to $260 per week, plus up to an 80 per cent hike in electricity costs over the next 15 months due to skyrocketing Baha mas Power & Light (BPL) fuel charges.

Combined, he warned the Prime Minister that these “may prove to be the pro verbial straw that breaks the camel’s back for many of our members who are still in post-COVID sur vival mode. Currently, our expense base is well over 20 percent. These changes across-the-board will increase this number dras tically, thereby seriously impacting a sector that provides jobs for hundreds of Bahamians while itself being a vitally essential service in the provision of food”,” Mr Beneby said.

“We are gravely con cerned that the expanded list will result in job losses and, indeed, store closures which will impact additional businesses and the wider community. As an asso ciation, we have taken the considered decision that we are unable to make these price changes on October 17 due to the fact that we were not consulted prior to such a decision being made.

“The changing of our prices without due and proper notice will have the direct consequences of massive losses being made on items which have been recently landed as well as those en route and many businesses are operating on the narrowest of profit margins given the overall cost of doing business. In short, to do so would be to sign a death warrant for our businesses.”

The Government appeared to concede this last night. The Ministry of Economic Affairs said it “values public consultation with all of our stakeholders regarding the understand ing or impact of government policy announcements and changes”, and pledged that it will “continue to consult broadly with the retailers and wholesalers” and their associations on the price control changes.

“The changes to the price control regulations come into full effect on October 17, 2022. However, the Min istry of Economic Affairs and the Price Control Com mission recognise the need for an extended period to phase in the price control adjustments and will forgo any penalties and enforce ment during the adjustment period,” the statement added.

“The Ministry of Eco nomic Affairs and the Price Control Commission will continue to review this recent change in the regu lation while maintaining an open channel of con sultations in the interest of consumers, retailers and wholesalers.”

The Ministry of Health and Wellness also gave similar ground after Dr Michael Darville, the minister of health and wellness, and permanent secretary, Colin Higgs, met with pharmaceutical retailers, wholesalers and representatives from the Bahamas Pharmacy Coun

and Bahamas

Association to discuss the price control changes.

“The minister of health and wellness confirmed that recognising the effective date for implementation of the regulations is Monday, October 17, 2022, time allotted for adjustments on inventory has been given in light of the number of items listed,” the ministry said. “Minister Darville confirmed the Govern ment’s position by adding that no penalties will be exacted while these inven tory adjustments are being made. He described the meeting with the group as fruitful.”

The Prime Minister, in unveiling the expanded price control regime, said it was for a six-month trial for food items and three months for pharmaceuti cal drugs, although there is every possibility it may be extended further.

Food wholesale margins, or mark-ups, are capped at 15 percent for all 38 product line items listed, while those

for retailers are set at 25 percent across-the-board.

Those goods impacted, some of which are already price controlled, are baby cereal, food and formula; broths, canned fish; con densed milk; powdered detergent; mustard; soap; soup; fresh milk; sugar; canned spaghetti; canned pigeon peas (cooked); peanut butter; ketchup; cream of wheat; oatmeal and corn flakes.

The remainder are macaroni and cheese mix; pampers; feminine nap kins; eggs; bread; chicken; turkey; pork; sandwich meat; oranges; apples; bananas; limes; tomatoes; iceberg lettuce; broccoli; carrots; potatoes; yellow onions; and green bell pep pers. The regulations were signed on October 12, the same day as the Prime Minister’s speech, by the minister responsible for consumer protection, who is Michael Halkitis, minister of economic affairs.

The retail mark-up for eggs appears to have been increased from the present 10 percent to 25 percent, providing a very modest boost for retailers. But, while the 25 percent maxi mum across-the-board mark-up is slightly higher than the “general” 23 per cent permitted currently, retailers say the increase is insufficient to offset the expansion of price controls to more products.

The Price Control (Drugs) (Amendment) Regulations 2022 impose price-controlled mark-ups ranging from 15 percent to 18 percent on phar maceutical wholesalers.

For retailers, the range is from 35 percent to 40 per cent. The medicines covered include vaccines, anti-dia betic drugs, decongestants, laxatives, contraceptives, antacids, anti-hypertension medicines, cough prepara tions, cardiovascular agents and serums.

RETAILERS, Wholesalers and representatives from the Bahamas Pharmacy Council and Bahamas Pharmacy Association participated in a consultative meeting with the Minster of Health & Wellness the Honourable Dr. Michael R. Darville this morning. The meeting aimed to provide clarity as it relates to the enforcement of adjustments to the Price Control Act (Chapter 339) with reference to the Price Control (Drug) (Amendment)

which revokes and replaces the schedule of S.I. No.76 of 197. The Minister of Health & Wellness confirmed that recognizing the effective date

Monday

October 2022, time allotted for adjustments on inventory has been given in light of the number of items listed. Minister Darville conferred the government’s position by adding

be exacted while these inventory adjustments are being made. He described the meeting with the group as fruitful. Further consultations will be facilitated via the office of the Minister of Economic Affairs, the Honourable Michael Halkitas and the Price Control Commission.